Xinuos Inc. sues IBM and Red Hat, Amazon defends itself amidst rising Anti-trust scrutiny, CCI investigates WhatsApp’s Privacy Policy update and more.

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Xinuos Inc. sues IBM and Red Hat, Big Tech Chinese Firms scrutinized by Anti-trust Regime, The FTC forms international group for monitoring Pharma mergers, Amazon defends itself amidst rising Anti-trust scrutiny, Facebook’s suffers massive user data breach revealing sensitive data, CCI investigates WhatsApp’s Privacy Policy update and Balancing Privacy and Surveillance through COVID-19 lockdowns.

Xinuos Inc. sues IBM and Red Hat

Xinuos, Inc., which is an American software company, has filed a copyright infringement and antitrust lawsuit against IBM and Red Hat, Inc., in March 2021, alleging unauthorized use of their software code and subsequent engagement in anti-competitive behaviour.

The complaint filed by Xinuos alleges that IBM stole their intellectual property and used it to create and market a product that competed directly with that of Xinuos’. Further, with the illegally obtained software code, IBM and Red Hat decided to split the relevant market unfairly and use their growing market leverage against customers, rivals, and other stakeholders. Once this plan was executed, IBM bought Red Hat to prevent any deviation from the arrangement in the future.

As alleged by Xinuos, this illegal collaboration between IBM and Red Hat resulted in Xinuos’ product OpenServer 10 being unfairly eliminated from the market. Xinuos thus filed a complaint, claiming punitive damages as well as injunctive relief.

Big Tech Chinese Firms scrutinized by Anti-trust Regime

Following the regulatory trend in the west, China’s Big Tech firms like, Alibaba, Tencent and Baidu, are facing scrutiny under the Chinese anti-trust law. This exercise is going to severely affect the growth of Big Tech, if the Chinese authorities decide to tighten their grip on this industry. Major companies such as Tencent, Baidu and Didi Transport were fined for their failure in obtaining approvals from the authorities for various reasons.

Alibaba has been under the microscope since December 2020 and was warned that it would have to pay a fine of USD 1 billion, if found violating the Chinese antitrust laws.

The Chinese government unveiled their draft regulations in November 2020, aiming to curb anti-competitive behaviour such as colluding on sharing sensitive consumer data or in a bid to eliminate competitors, with the intent to establish the fact that no one person or organization is above it. This move by the anti-trust regulators in China, could severely affect the progress of Big Tech firms in the country.

The FTC forms international group for monitoring Pharma mergers

The Federal Trade Commission (FTC), has recently announced the formation of an international working group that will review pharmaceutical company mergers, citing the inefficacy of the current regime in analyzing pharma mergers.

The working group will consist of the antitrust authorities from Canada, the European Union and the United Kingdom, in addition to the US Department of Justice (Antitrust Division) and Offices of State Attorneys General from within the US itself. The working group has not set a timeline and would first focus on previous enforcement actions, their efficacy and whether change will be needed or not.

Amazon defends itself amidst rising Anti-trust scrutiny

Amazon, the world’s largest online retailer has been accused of anti-trust violations and is rapidly hiring ex federal prosecutors to build up its defense. The anti-trust subcommittee’s report reveal that Amazon had engaged in anti-competitive behavior by using data of their vendors to gain a competitive edge, thus undercutting them. Matters are pending before both the chambers of Congress, as well as from states.

In addition to hiring ex federal prosecutors, it is also hiring economists to handle antimonopoly issues by developing economic models and evidence to support their legal arguments. In 2020, Amazon ended up spending the most it has ever spent lobbying, second only to Facebook. They have even expanded their agendas to COVID-19, data privacy, drones and veteran employment. However, Amazon is yet struggling to create an effective defense.

Facebook’s suffers massive user data breach revealing sensitive data

Facebook has once again fallen victim to a massive data breach that compromised sensitive data of 533 Million of its users from 106 countries. Out of 533 Million, 32 million records were leaked from the US alone, and nearly 11 million from the UK, which included 6 million Indians.

The data was posted on a “hackers Forum”, in the form of a huge database and included details such as the location, full names, birth dates, complete bio, Facebook IDs, and even the email addresses of the Facebook users.

Facebook assured its users by stating that the data was from 2019 and thus was old and was mostly to be used for identity theft.

CCI investigates WhatsApp’s Privacy Policy update

WhatsApp, one of India’s most used messaging services, also owned by Facebook is under the lens of the Competition Commission of India (CCI) for alleged anti-trust violations. WhatsApp introduced its policy update in the start of January 2021 and received immediate and severe backlash, as the new policy essentially created a legal backdoor for Facebook to have access to sensitive data of more than 2 Billion users of WhatsApp. CCI states that the policies update recently introduced by WhatsApp are violative of Indian anti-trust laws.  The commission has now ordered the Director General to undertake investigation and submit a report within 60 days.

The commission seeks to ascertain whether WhatsApp has abused its dominant position in the market to introduce a policy on a “take it or leave it” basis. Facebook is observed to have a direct benefit from the change in privacy policy and this is one of the aspects that is being looked into by the CCI.

Whatsapp has been working with the government of India to reach an amicable solution, since this is a crucial matter for Facebook, given their humongous investment of USD 5.7 Billion into Mukesh Ambani’s Jio Platforms.

Balancing Privacy and Surveillance through COVID-19 lockdowns

Privacy enthusiasts and supporters from the west influenced surveillance related privacy policies across the globe, especially since the beginning of the COVID-19 lockdowns across the globe. However, a fact the enthusiasts failed to recognize is the positive impact technology could have had over people’s lives by making the lockdowns less restrictive than they are, but, at a cost. Taiwan and New Zealand are two countries who handled their country’s lockdown with relative ease, producing some of the best results in the world by following two very different options.

New Zealand has clearly established its priority, which is, privacy of its citizens, and to ensure the same, it imposed several lockdowns to prevent the spread of the virus. Taiwan on the other hand, took a different approach, by using cell phone towers, GPS and real time medical information. Using real time medical information and location services, Taiwan made it possible for a better lockdown experience by allowing people to home quarantine.

The debate between safeguarding privacy and compromising it tips to the latter side in such a situation when the compromise leads to extraordinary benefits, which allowed people to live in a much more comfortable way during Taiwanese lockdowns.


Authored and compiled by  Neharika Vhatkar (Associate, BananaIP Counsels) and Shaantanu Krishnan (Legal Intern)

The IP, Privacy and Antitrust Law News Bulletin is brought to you by the Consulting/Strategy Division of BananaIP Counsels, a Top IP Firm in India. If you have any questions, or need any clarifications, please write to contact@bananaip.com  with the subject: IP, Privacy and Antitrust  Law News.

Disclaimer: Please note that the news bulletin has been put together from different sources, primary and secondary, and BananaIP’s reporters may not have verified all the news published in the bulletin. You may write to contact@bananaip.com  for corrections and take down.

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